Blockchain Papers

David Kuo Chuen Lee, Ernie G. S. Teo

No abstract is available for this record.

Elena Sinelnikova-Muryleva, Kirill Shilov, Andrey Zubarev

The aim of the article is to systematize the views on the concept of cryptocurrency from the literature and among international and national organizations and regulators, to analyze its economic essence and the place in the modern monetary and financial system. The definition and the functions of cryptocurrency are discussed in the framework of descriptive and theoretical analysis. The paper systematized the existing approaches to the concept analysis of cryptocurrency; the place of cryptocurrency in modern economic theory is shown.The article concludes that cryptocurrencies are often determined through the set of basic characteristics. Cryptocurrencies are not money, though they can perform the main function of money — to be a means of payment; they can be a means of making settlements, assets, platforms for concluding smart contracts, a means for crowdfunding. They are not private money in Hayek’s interpretation. Cryptocurrencies can be described in the framework of the models of new monetarism (payment economics).

Janayna Mesquita De Oliveira, Marielly Monize Dos Santos Ribeiro, Marco Aurelio Alves Leal do Ó, Jamille Carla Oliveira Araújo

No mundo atual onde as inovacoes em tecnologia digital facilitam a vida das pessoas, as criptomoedas tem ganhado espaco e cada vez

Marcos Nogueira Ruppelt, André Brum Missaggia, Bruno Miranda dos Santos, Franco da Silveira · 5 authors

O meio de troca, ou “dinheiro”, é à base da civilização, uma ferramenta de negociação entre os homens para que os homens não sejam as ferramentas de negociação. A possibilidade de estar presenciando o surgimento de uma moeda espontaneamente eleita pelo mercado é o grande motivador deste trabalho. É possível que esteja ocorrendo atualmente uma revolução monetária na história da humanidade e isso por si só já se torna objeto de investigação relevante. Diante disso, o trabalho buscou descobrir se o Bitcoin pode ser considerado uma moeda atualmente, levando em consideração a evolução histórica e as bases que formaram sistemas monetários durante a evolução das civilizações. Para realização deste trabalho, optou-se por um estudo qualitativo e exploratório descritivo. Como conclusão foi possível encontrar como resultados o fato de que o aumento da liquidez e aceitação do Bitcoin estão fazendo com que ele se consolide como um meio de troca de fácil acesso, inclusive, tornando-se moeda corrente em alguns países, por essa descentralização e democratização de acesso.

Andrzej Sławiński

The paper highlights why, contrary to frequent claims, cryptocurrencies will not replace the existing monetary system. The reason is that despite its shortcomings the current monetary system is a product of a long evolution which had adjusted it to the needs of the economy. Cryptocurrencies will probably remain what they have been during the last decade, i.e. the popular speculative assets and the means of payment used – due to their anonymity – for illicit operations. The recent monetary system, based on deposit money issued by commercial banks, will not be replaced also by deposit money issued by central banks (Central Bank Digital Currency) as the CBDC would lack a rational mechanism of its allocation and would pose risks to financial stability

Amit Bhaduri

Abstract Macroeconomic strategies and policies have differed significantly among Asian countries, and yet some common issues recur despite their immense diversity in inherited historical initial conditions, differences in political systems, geopolitical situations, location and size, and natural resource endowments. The chapter examines from a comparative perspective issues like unemployment, state versus market, domestic versus foreign market, degree of openness in trade, investment and finance, industrial and technology policy, decentralization, and economic and social inequality. While some countries have been more successful than others in dealing with these issues, our comparative perspective also shows development itself as a moving target, thus requiring flexible institutional and policy responses at each separate stage of development, which makes uniform guidelines misleadingly over-simplistic.

Jackie Johnson

Using Bitcoin trading data in Venezuelan bolivars from the LocalBitcoins peer-to-peer market place and using the theory of Purchasing Power Parity (PPP), Bitcoin, as a single universal asset, is substituted for the ‘basket of goods’ normally used in the PPP, allowing the estimation of the relationship between the Venezuelan bolivar and the United States dollar. In this analysis Bitcoin is used as a tool to enable the calculation of the bolivars to dollars unofficial exchange rate and consequently the implied inflation rate. Using Bitcoin’s publicly available prices in this way enables a government’s economic mismanagement to be identified more quickly than the typical approach of measuring changes in the Consumer Price Index. Venezuela is currently in crisis, which this approach identifies as a problem as far back as 2014, as official and unofficial exchange rates diverge and inflation rates increase yearly reaching an unbelievable 70,000% in 2018 alone.

Thierry Dayr Leandro Chemalle

O presente trabalho visa analisar a possível influência de sentimentos, como medo e confiança, indentificados nas decisões dos agentes através de índices estatísticos, na composição do logartimo natural dos retornos observados do Bitcoin no período entre Outubro de 2010 e Fevereiro de 2019. Em outras palavras, procurou-se verificar se além da suposição factível de influência nas condutas dos agentes, os sentimentos podem ter correlação direta nos processos de valorização e desvalorização do Bitcoin na janela temporal contemplada.

Andres F. Cifuentes

The rise of cryptocurrencies in Argentina and Venezuela in recent years shows how a highly distressed economy could become fertile ground for decentralized digital currency. This article analyzes similar traits between these two nations and examines why a collateral result of high inflation, tangled monetary regulation, and political instability could be the rapid growth of cryptocurrencies that are not linked to a central bank. Mistrust in central government authorities and national currency volatility that surpasses that of traded cryptocurrencies open a window for intangible ways of storing the falling value of local fiat currency. This article sets a general framework in order to have a better understanding of the growth of decentralized digital currencies in developing economies and continues to explain the rise of such technology in recent times in Argentina and Venezuela.

Markus K. Brunnermeier, Dirk Niepelt

We develop a generic model of money and liquidity that identifies sources of liquidity bubbles and seignorage rents.We provide sufficient conditions under which a swap of monies leaves the equilibrium allocation and price system unchanged.We apply the equivalence result to the "Chicago Plan,'' cryptocurrencies, the Indian de-monetization experiment, and Central Bank Digital Currency (CBDC).In particular, we show why CBDC need not undermine financial stability.

Francisco Cardozo Oliveira, Sandro Mansur Gibran, Felipe Américo Moraes

A presente pesquisa tem como objetivo investigar como as criptomoedas têm impactado a economia mundial, bem como averiguar se existem indícios de como será sua participação nas transações diárias no futuro, seja como meio de pagamento online, ou como moeda. Após mais de 10 anos desde o advento da primeira criptomoeda, o Bitcoin, algumas características impactaram o modo como as transações são realizadas atualmente, o que fomentou discussões sobre suas vantagens e desvantagens. Durante a pesquisa, foram coletados os principais impactos causados pela criação dessa criptomoeda. São elas a possibilidade de realizar transações com baixo custo, serem acessíveis a qualquer pessoa, principalmente àquelas que estão em países em desenvolvimento, além de significar em uma proteção para crises políticas e contra a inflação. Entretanto, há efeitos que se apresentam como pontos negativos da tecnologia, tais como a alta volatilidade, possibilidade de perda ou fraudes e o incentivo à utilização em comércio ilícito, advindo do incremento da privacidade. A conclusão é que, em que pese o tempo transcorrido desde a criação, não foi suficiente para se estabelecer como se dará o uso para finalidades lícitas. A alta volatilidade dificulta sua utilização como moeda, sendo que há pouco conhecimento sobre o tema de uma maneira geral. Em contrapartida, independentemente do alcance que terá o uso lícito das criptomoedas, o indicativo é que a utilização para a prática ilícita estará presente independente de seu sucesso. Conclui-se que haverá um significativo avanço para que as criptomoedas se estabeleçam mais firmemente no mercado lícito quanto ocorrer uma correta regulação pelos Estados. Palavras-chave: Bitcoin; criptomoedas; futuro; efeitos; economia.

FELIPE ARAUJO NASCIMENTO

[pt] O presente estudo busca entender os principais determinantes da flutuação de preços do Bitcoin através de variáveis relacionadas à força de mercado, tecnologia, reconhecimento público e variáveis macroeconômicas, estimando os coeficientes do vetor de correção de erros (VECM) e do procedimento autoregressivo de defasagens distribuídas (ARDL). Os resultados apresentaram que o reconhecimento público não possui impactos significantes sobre o preço de mercado do Bitcoin, enquanto as forças de mercado, fatores tecnológicos e as variáveis macroêconomicas apresentam impacto significativo em pelo menos um dos modelos utilizados.

Matheus Parchen Dreon Tomé

O presente artigo possui o escopo específico de analisar a possibilidade de tributação, no Brasil, do Bitcoin, relativamente ao Imposto sobre a Renda e Proventos de Qualquer Natureza, tanto no que toca à pessoa jurídica como à pessoa física (IRPJ e IRPF, respectivamente). Assim, será verificado o tratamento atualmente dado ao Bitcoin no Brasil, e, concomitantemente, analisada a retidão do tratamento. A partir de um estudo pautado pela ótica multidisciplinar que o Bitcoin requer, será possível um exame mais eficaz das regras tributárias relativas ao Imposto de Renda possivelmente aplicáveis ao que se está chamando de “moeda virtual”.

Paul Barnes

It is argued here that because a cryptocurrency has no intrinsic value, problems relating to day-to-day valuation and pricing arise. It is shown how these lead to the reversal of the conventional relationship between supply and demand and the susceptibility of the cryptocurrency markets to irrationality and speculative bubbles arising from the herding instinct. Also, as the cryptocurrency markets are largely free of regulation and the desire for privacy by founders, owners and developers is so great, accountability and disclosure requirements are either minimal or non-existent, leading to the manipulation of cryptocurrency prices, volume and market capitalisation information. Another consequence of their freedom from regulation, particularly surprising given the importance placed on their security through the use of blockchain, is the magnitude of thefts of cryptocurrency (both in terms of frequency and size) levels of which would neither be expected nor tolerated in regulated financial markets.

Ana Luísa Moutinho, Roberto Silva da Penha

With the advance of the cryptocurrencies in particular Bitcoin in relation to population and the valuations of the same mainly in 2017. It becomes common the comparison of Bitcoin with other assets, being used to reduce the risks of an investment portfolio, also being considered a new asset class. In view of this scenario, the following research question is

José Domingo Portero Lameiro, Elisabeth T. Pereira

espanolLas economias modernas son hoy en dia economias monetarias, en las que el dinero desempena un papel fundamental en el desarrollo, la estabilidad y el bienestar de las naciones y sus poblaciones. Keynes (1936) subrayo que las economias del siglo XX ya no eran economias de cambio, sino economias monetarias en las que el dinero desempena un papel predominante. La relevancia del dinero en las economias modernas ha evolucionado con la evolucion de la sociedad y con la tecnologia, el conocimiento y las nuevas formas de comunicacion que caracterizan a los siglos XX y XXI, especialmente a este ultimo. Con este fin, el proposito de este capitulo es describir la importancia y la evolucion del dinero en las economias modernas en los ultimos cien anos, sobre la base de una estructura general y evolutiva que caracteriza al sistema financiero y monetario mundial de tendencias actuales y futuras, en su integracion de tecnologias, nuevos instrumentos financieros y nuevas formas de pago. Este articulo pretende describir teoricamente, y utilizando estudios de casos reales siempre que sea posible, la importancia y la evolucion del dinero en las economias modernas, considerando la evolucion del dinero sufrida desde la revolucion industrial, a traves de las diversas formas de dinero y las demandas de dinero. los sistemas financieros y monetarios en los ultimos cien anos, hasta el dia de hoy y las tendencias futuras de los sistemas y formas de pago. Se considerara el dinero metalico, el papel moneda, el dinero escritural, el dinero plastico y, sobre todo, la existencia de dinero electronico basado en transferencias electronicas y sistemas de pago electronico y las criptodivisas (por ejemplo, Bitcoin) que surgieron a finales de la primera decada del siglo XXI. Se presentaran los distintos conceptos que intervienen en la descripcion del dinero y que permiten un mayor conocimiento sobre este tema. Al final se presentaran las tendencias futuras. EnglishThe modern economies of nowadays are monetary economies, where money has a key role in the development, stability and welfare of nations and their populations. Keynes (1936) emphasized that the Economies of 20th century were not more change economies but monetary economies in which money have a preponderant role. The relevance of money in modern economies has evolved with the evolution of society and with the technology, knowledge and new forms of communication that characterize the 20th and 21st centuries, especially with the latter one. With this purpose, the aim of this chapter is describe the importance and evolution of money in modern economies in the last hundred years, based in the a general and evolutionary framework that characterizes the global financial and monetary system of today and future trends, on its integration on technologies, new financial instruments and new forms of payments. This article aims to describe theoretically, and with recourse to real cases of study whenever possible, the importance and evolution of money in modern economies, considering the evolution of the currency suffered since the industrial revolution, through the various forms of money and requirements of the financial and monetary system in the last hundred years, until today and future trends of the systems and form of payments. Will be considered the metallic money, paper money, scriptural money, plastic money and above all the existence of electronic money based on electronic transfers and systems of electronic payments and the crypto-coins (for example the Bitcoin) that emerged at the end of the first decade of the 21st century. The various concepts involved in the currency description and that allow a greater knowledge on this topic will be presented. Future trends will be presented at the end.

John Taskinsoy

No abstract is available for this record.

David Andolfatto, Andrew Spewak

W hat are the long-run prospects of Bitcoin as an investment?The bullish case is that Bitcoin will appreciate indefinitely due to its capped supply and an ever-growing demand.The bearish case is that Bitcoin's price will fall to zero, as it's an intrinsically worthless asset.We think the future price path is more likely to remain bounded between these two extremes.Consider first the bullish case for Bitcoin.We think this idea is too optimistic even if one grants that its supply is fixed and its demand is likely to grow. 1 The U.S. dollar price of Bitcoin will also depend on how its exchange rate relative to other cryptocurrencies evolves over time in the face of an ever-expanding supply of alternative cryptocurrencies, which we refer to as Altcoin. 2 The bullish case assumes that the nominal exchange rate between Bitcoin vis-à-vis other cryptocurrencies will adjust in proportion to their relative supplies.That is, Bitcoin is expected to appreciate relative to its competitors or, equivalently, its market-capitalization share will stay constant over time.But must this necessarily be the case?Consider the following thought experiment.

Richard K. Lyons, Ganesh Viswanath-Natraj

We take this question to be isomorphic to, "What Keeps Fixed Exchange Rates Fixed?" and address it with analysis familiar in exchange-rate economics. Stablecoins solve the volatility problem by pegging to a national currency, typically the US dollar, and are used as vehicles for exchanging national currencies into non-stable cryptocurrencies, with some stablecoins having a ratio of trading volume to outstanding supply exceeding one daily. Using a rich dataset of signed trades and order books on multiple exchanges, we examine how peg-sustaining arbitrage stabilizes the price of the largest stablecoin, Tether. We find that stablecoin issuance, the closest analogue to central-bank intervention, plays only a limited role in stabilization, pointing instead to stabilizing forces on the demand side. Following Tether's introduction to the Ethereum blockchain in 2019, we find increased investor access to arbitrage trades, and a decline in arbitrage spreads from 70 to 30 basis points. We also pin down which fundamentals drive the two-sided distribution of peg-price deviations: Premiums are due to stablecoins' role as a safe haven, exhibiting, for example, premiums greater than 100 basis points during the COVID-19 crisis of March 2020; discounts derive from liquidity effects and collateral concerns.

Pierpaolo Benigno, Linda Schilling, Harald Uhlig

We analyze a two-country economy with complete markets, featuring two national currencies as well as a global (crypto)currency. If the global currency is used in both countries, the national nominal interest rates must be equal and the exchange rate between the national currencies is a risk-adjusted martingale. Deviation from interest rate equality implies the risk of approaching the zero lower bound or the abandonment of the national currency. We call this result Crypto-Enforced Monetary Policy Synchronization (CEMPS). If the global currency is backed by interest-bearing assets, additional and tight restrictions on monetary policy arise. Thus, the classic Impossible Trinity becomes even less reconcilable.

Peter K. Hazlett, William J. Luther

No abstract is available for this record.

Claudio Borio

This essay examines in detail the properties of a well functioning monetary system - defined as money plus the mechanisms to execute payments - in both the short and long run, drawing on both theory and the lessons from history. It stresses the importance of trust and of the institutions needed to secure it. Ensuring price and financial stability is critical to nurturing and maintaining that trust. In the process, the essay addresses several related questions, such as the relationship between money and debt, the viability of cryptocurrencies as money, money neutrality, and the nexus between monetary and financial stability. While the present monetary system, with central banks and a prudential apparatus at its core, can and must be improved, it still provides the best basis to build on.

Sudhakar Sukhadeo Morey

The passage of the constitution (Seventy-third Amendment) Act, 1992 marked a watershed in the history of Modern India. With this amendment, a uniformity structure of Panchayats emerged throughout the country. Similarly, the passage of the constitution (Seventy-Fourth Amendment) Act, 1992 was a land mark in the history of municipal administration in India. As a result of these amendments, Panchayats and Municipalities are now constitutional bodies forming third tier of the federal policy of India.1 India’s decentralization initiative in the form of seventy-third and seventy fourth Amendments poses challenges and offers opportunities. Tenth Finance Commission onwards every Finance Commission allocated the grants funds to Panchayati Raj Institutions (PRIs).

Grégory Claeys, Maria Demertzis, Konstantinos Efstathiou

This Policy Contribution tries to answer two main questions: can cryptocurrencies acquire the role of money? And what are the implications for central banks and monetary policy? Money is a social institution that serves as a unit of account, a medium of exchange and a store of value. With the emergence of decentralised ledger technology (DLT), cryptocurrencies represent a new form of money: privately issued, digital and enabling peer-to-peer transactions. Historically, currencies fulfil their main functions successfully when their value is stable and their user network sufficiently large. So far, cryptocurrencies are arguably falling short against these criteria. They resemble speculative assets rather than money. Primarily this is because of their inherent volatility, which is the by-product of their inelastic supply, and which limits their widespread use as a medium of exchange. Cryptocurrency protocols could theoretically evolve to limit their volatility and correct their current deficiencies. If successful, this could lead to an increase in their popularity as an alternative to official currencies. A successful alternative to official currencies could put pressure on those who manage official currencies to provide better policies. But the widespread substitution of central bank currency for cryptocurrencies would effectively create parallel currencies. This by itself could create risks to the effectiveness of monetary policy, to financial stability and ultimately to growth. Nevertheless, the risks of cryptocurrencies becoming serious contenders remain small as long as fiat currencies issued by the world's major central banks continue to deliver effectively the three traditional functions of money. It would take a deep crisis of trust in official currencies for their widespread substitution by cryptocurrencies to materialise. For cryptocurrencies to replace official currencies they would have to overcome a triple challenge. First, the supply of cryptocurrency would need to act as an instrument (or identify a different instrument) that affects the economy. Second, in the presence of fractional reserve banking, the supply would need to respond to liquidity crises and act as a lender of last resort in order to safeguard financial stability. Third, there would need to be a system of checks and balances to keep the agent, ie the cryptocurrency issuer, accountable to the principal, ie society, which is not possible because cryptocurrencies are automatically and privately-issued. For these reasons, official currencies controlled by inflation-targeting independent central banks still appear to be a far superior technology than cryptocurrencies to provide the money functions.